Exam 16: Pricing and Credit Decisions

Hollywood Amusement, a small independent movie theatre, decreased the price of admission from R10 to R9.Prior to the price decrease, the business sold 1 000 tickets each month.After the price decrease, it experienced ticket sales of 1 500 a month.If the change in sales is attributable only to the change in price, Hollywood Amusement faces ____ for its movie tickets.

Chocolate Concoctions, a maker of high end chocolate candies, decided to price its boxes of candies below the long-term market price.The decision was made to increase market share and discourage other businesses from entering the chocolate market.Chocolate Concoctions was implementing a:

The Golf Global Company sells 1 000 shirts annually at a price of R35 each.If the company's pricing policies adhere to a 40% mark-up of selling price, the cost of each shirt is:

Lorrie Vernon, owner of All That Swag, used discount coupons for special event items to drive customers to her retail stores.Using such promotions and stating that "the regular price is never chiselled in stone" would indicate Lorrie is using a:

Match the term with its definition.Some terms may not be used a.Ageing schedule b.Average pricing c.Bad-debt ratio d.Break-even analysis e.Break-even point f.Contribution margin g.Elastic demand h.Elasticity of demand i.Inelastic demand j.Value -Sales volume at which total sales revenue equals total costs and expenses.

Commissions paid to a salesperson would be included in:

Match the term with its definition.Some terms may not be used a.Consumer credit b.Credit bureaus c.Credit card d.Credit e.Instalment account f.Open charge account g.Revolving charge account h.Trade credit i.Trade credit agencies j.Value -An agreement between a buyer and a seller that allows for delayed payment for a product or service.

Match the term with its definition.Some terms may not be used a.Consumer credit b.Credit bureaus c.Credit card d.Credit e.Instalment account f.Open charge account g.Revolving charge account h.Trade credit i.Trade credit agencies j.Value -The extent to which a good or service is perceived by a customer as meeting his or her needs or wants, measured by the customer's willingness to pay for it.

Information Express is a privately owned and operated organisation that collects credit information on business firms.After the organisation analyses and evaluates the data, it makes credit ratings available to client companies for a fee.Information Express is a:

The ageing schedule is a categorisation of accounts receivable based on the length of time they have been outstanding.

Pricing based on what the market will bear works only for non-standardised products in markets where there is low competition.

In general, products that are consumed in fixed amounts have:

Fine Framings, a small framing shop, uses mark-up pricing to arrive at a final selling price.The business sells its frames at a price of R25, given a R15 unit cost.Fine Framings' mark-up on the selling price is ____, and its mark-up on cost is ____.

The seller's measure of what he or she is willing to receive in exchange for transferring ownership or use of a product or service is:

An instalment account is a typical trade credit agreement.

What would be the break-even point in units for a business selling trekking poles at a selling price of R130 per pair, variable cost per set is R70, and fixed costs are R100 000?

Match the term with its definition.Some terms may not be used a.Consumer credit b.Credit bureaus c.Credit card d.Credit e.Instalment account f.Open charge account g.Revolving charge account h.Trade credit i.Trade credit agencies j.Value -A line of credit on which the customer may charge purchase at any time, up to a pre-established limit.

Match the term with its definition.Some terms may not be used a.Product line pricing b.Average pricing c.Follow-the-leader pricing d.Mark-up pricing e.Premium strategy f.Prestige pricing g.Price lining strategy h.Price i.Skimming price strategy j.Value k.Variable pricing strategy -A technique that uses a particular competitor as a model in setting prices.

Match the term with its definition.Some terms may not be used a.Product line pricing b.Average pricing c.Follow-the-leader pricing d.Mark-up pricing e.Premium strategy f.Prestige pricing g.Price lining strategy h.Price i.Skimming price strategy j.Value k.Variable pricing strategy -A technique that sets very high prices for a limited period before reducing them to more competitive levels.

Which type of organisation is a good source of consumer credit information?